India is the world’s largest producer of agarbatti, or incense sticks. Agarbatti and dhoop products are in high demand because they are a part of Indian tradition and are essential to any ritual, especially in the Hindu religion. According to the Khadi and Village Industries Commission, India consumes around 1,490 tonnes of incense sticks every day. Locally, however, only 760 tonnes per day are produced.
Agarbatti and dhoop products are in high demand because they are a part of Indian tradition and are essential to any ritual, especially in the Hindu religion. Agarbatti is mostly made by hand in India, where 4 lakh people are employed, with about 80% of them being women. India consumes around 1490 tonnes of incense sticks every day, according to the Khadi and Village Industries Commission (KVIC).
According to a PIB press release dated June 20, 2020, only 760 tonnes per day are produced locally. Raw agarbatti was imported into India due to a massive gap in consumption and production. Between 2009 and 2019, the percentage of raw agarbatti imported increased from 2% to just over 80%.
India imported incense sticks worth a total of 31 crores in 2009, rising to a total of 546 crores in ten years. According to KVIC, the increase in agarbatti imports occurred as a result of the reduction in import duty from 30% to 10% in 2011. It resulted in the closure of 25% of the country’s incense stick manufacturing facilities.
Import Restrictions for Agarbatti
In 2019, the Modi government imposed import restrictions on agarbatti and other similar products 2019 due to a significant increase in inbound shipments from countries such as China and Vietnam. The Ministry of Commerce placed raw agarbatti imports in the ‘restricted category’ on August 31, 2019. As a result, several incense stick units in Maharashtra, Madhya Pradesh, Uttar Pradesh, Gujarat, and several northeastern states have been revived. Local traders, on the other hand, were prompted to import bamboo sticks as a result of the move.
Bamboo is the most common material used to make incense sticks. Due to bamboo regulations in India, the plants are wild-harvested rather than cultivated. According to The Economic Times, imports of bamboo sticks used for incense sticks increased rapidly after India signed a free trade agreement with Vietnam as part of the Association of Southeast Asian Nations (ASEAN) bloc. Bamboo sticks imports increased from 210 crores in 2018-19 to 370 crores in 2019-20. As a result, India increased the import duty on bamboo sticks from 10% to 25% in 2020 to reduce imports from China and other countries. The KVIC applauded the decision because it discouraged heavy imports and boosted local agarbatti manufacturing.
KAAM for ‘Atmanirbhar Bharat’
In July 2020, KVIC submitted KAAM, or Khadi Agarbatti Atmanirbhar Mission 2021, to the Ministry of Micro, Small and Medium Enterprises for approval in order to make India self-sufficient. Nitin Gadkari, the Union Minister for MSME, approved it on August 2, 2020. The programme, according to the Ministry of MSME, aimed to create jobs for unemployed and migrant workers across the country while also significantly increasing domestic Agarbatti production.
The Khadi Agarbatti Atmanirbhar Mission scheme was designed on a Public-Private Partnership (PPP) model to assist private manufacturers in scaling up their incense stick production in the country. KVIC provides the artisans with Automatic Agarbatti Making Machines and Powder Mixing Machines as part of the scheme. The machines are made locally and distributed to the artisans through private Agarbatti manufacturers.
A 5% subsidy on the cost of the machines is also included in the scheme. The remaining 75% is recovered from the artisans in easy monthly instalments. The raw materials for making incense sticks are provided by private business partners, who also pay the workers’ daily wages. The cost of worker training, on the other hand, is split between KVIC (75%) and the business partners (25 per cent).
Creating Long-Term Employment
The scheme requires very little capital to generate long-term employment. When four artisans work on a machine together, each artisan can earn a minimum of $300 per day for 15 per kg of Agarbatti making per person. Every artisan can earn a fixed amount of $250 per day by making powder. The scheme has been hailed as a major step toward achieving the Atmanirbhar Bharat objectives. Increased import duties and the implementation of KAAM will boost agarbatti manufacturing in India, create long-term jobs, and close the massive gap between incense stick consumption and production.
